Browse content similar to 06/06/2012. Check below for episodes and series from the same categories and more!
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105 years. Now for the latest financial news with Juliette Foster | :00:06. | :00:16. | |
:00:16. | :00:18. | ||
and World Business Report. The headlines: Bailing out the banks, | :00:18. | :00:22. | |
new plans from Europe to shift the burden from the taxpayer to the | :00:23. | :00:28. | |
bond holder. And the European Central Bank is expected to leave | :00:28. | :00:32. | |
rates unchanged today as it steps up the pressure on politicians to | :00:33. | :00:40. | |
sort out the debt crisis. Australia posts surprisingly strong growth | :00:40. | :00:50. | |
:00:50. | :00:54. | ||
figures thanks to the mining sector. The European Commission will | :00:54. | :01:01. | |
featanage stop the collapse of individual | :01:01. | :01:05. | |
banks from causing chaos throughout the rest of the European financial | :01:05. | :01:09. | |
system. Until now, national governments had used taxpayers' | :01:09. | :01:14. | |
money to bailout banks, but the commission is expected to suggest | :01:14. | :01:18. | |
the damage on the banking collapses limited to another group of people, | :01:18. | :01:28. | |
:01:28. | :01:33. | ||
Bank bond holders. Unsurprising we governments pumped public money | :01:33. | :01:40. | |
into domestic banks to protect the assets of depositors. The European | :01:40. | :01:43. | |
Commission wants an elected -- to lead banks fail in future without | :01:43. | :01:47. | |
troubling t troubling ter. The planners for Bank bond holders to | :01:47. | :01:51. | |
take more of the pain. Financial institutions and places like the | :01:51. | :01:54. | |
city of London are prepared to buy billions of dollars worth of bank | :01:54. | :01:58. | |
bonds every year at lower rates because they know that at the bank | :01:58. | :02:04. | |
goes bust, they will get their money from the depositors. But the | :02:04. | :02:07. | |
European Commission wants to switch their round so depositors come | :02:07. | :02:12. | |
first in the two. The advantage of this is, at a bank collapses, the | :02:12. | :02:16. | |
pain is limited to a few unfortunate financial funds, rather | :02:16. | :02:22. | |
than millions of members of the public. The disadvantages is that | :02:22. | :02:28. | |
fewer fund managers will want to buy back bombs at the current rates. | :02:28. | :02:31. | |
Appetite towards Bank bonds has reduced because they come more | :02:31. | :02:37. | |
risky. They also has the risk of, not only is the rate | :02:37. | :02:47. | |
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recharge going up, the access to funds are at fault. The commission | :02:48. | :02:53. | |
is releasing its proposals at a critical junction of banks and | :02:53. | :02:58. | |
bondholders. The Spanish bank needs $19 billion of emergency loans. | :02:58. | :03:01. | |
There are doubts about the finance of the entire Spanish banking | :03:01. | :03:06. | |
sector. We have a crisis of confidence in the banking sector in | :03:06. | :03:11. | |
Spain. To threaten any investors or bond holders at this point is | :03:11. | :03:19. | |
dangerous for the capital market. Bond traders have bought a hundred | :03:19. | :03:22. | |
billion euros worth of bank bonds this year. With the new rules in | :03:22. | :03:25. | |
force they will start asking for higher rates of return. The banks | :03:25. | :03:30. | |
will have to pass on the high rates in loans to customers. The measures | :03:30. | :03:34. | |
could make banking save before the public but they may also make it | :03:34. | :03:43. | |
costlier. As the situation in Europe's banking industry | :03:43. | :03:50. | |
deteriorates, policy makers meet to decide on interest rates. They are | :03:50. | :03:53. | |
unlikely to do anything today as Mario Draghi feels the central bank | :03:53. | :03:56. | |
has already during its fair share and that politicians need to do | :03:56. | :04:01. | |
more. The press conference will be watched for signs of when action | :04:01. | :04:05. | |
may come, after the Spanish admission that it has been shut out | :04:05. | :04:15. | |
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of borrowing from money markets. Let us be cut this point that the | :04:18. | :04:22. | |
CBD is making, they are saying they had been standing the tab for too | :04:22. | :04:27. | |
long. It is up to the politicians to do something. They have said | :04:27. | :04:32. | |
this before. Why should we be this and this time? We need to see a | :04:32. | :04:38. | |
combination of measures. They want to make sure they are not taxing in | :04:38. | :04:45. | |
isolation and the measures are sustainable. If there is too much | :04:45. | :04:48. | |
liquidity they will push up inflation rates. There is a degree | :04:48. | :04:53. | |
of urgency now. There are problems and the banking sector and Spain in | :04:54. | :04:58. | |
particular but more widely in banks in the eurozone. Action needs to be | :04:58. | :05:06. | |
taken quickly. The CBD can take action very quickly. The problem is | :05:06. | :05:11. | |
its agenda is to fight inflation. There is a subtle process of | :05:11. | :05:18. | |
redefinition going on. They are the end of last resort. It is about | :05:18. | :05:26. | |
fighting inflation and enduring financial stability. The CBD is in | :05:26. | :05:32. | |
its role winner finds liquidity to banks. It may do more maybe not | :05:32. | :05:37. | |
today, but in the future the situation may deteriorate. They | :05:37. | :05:42. | |
need some kind of joined up banking system which Tyson to what the | :05:42. | :05:47. | |
European Commission is proposing. What records can the CBD take | :05:47. | :05:54. | |
without compromising its authority? They will one signals that policy | :05:54. | :05:58. | |
makers can move towards structural reforms and closer banking fiscal | :05:58. | :06:05. | |
union. These decisions will take time. And we do not have any time. | :06:05. | :06:12. | |
The CBD is the only one that can act quickly. This I idea of having | :06:12. | :06:18. | |
this a wind down funds, so it takes the onus off the taxpayer, we heard | :06:18. | :06:23. | |
one reaction from the report that it was tantamount to bullying. | :06:23. | :06:31. | |
could have the opposite effect of raising bond costs. It was all make | :06:31. | :06:36. | |
it more expensive for banks to issue bonds. But the idea is to | :06:36. | :06:40. | |
dissociate bangs from governments. This is one proposal, there are | :06:40. | :06:50. | |
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others on the table. Staying with the subject of banks, Germany's | :06:51. | :06:55. | |
second-largest bank has had its credit rating cut by the ratings | :06:55. | :06:58. | |
agency Moody's because of increased risks from the eurozone and | :06:58. | :07:04. | |
concerns about the bank's ability to absorb them. Five other banks | :07:04. | :07:09. | |
will also downgraded. Google says it will start sending warnings to | :07:09. | :07:12. | |
use is that it believes have been targeted by state-sponsored side | :07:12. | :07:17. | |
attacks. The firm says it will bring up a banner highlighting the | :07:17. | :07:20. | |
danger when users are locked into the Google account. A link will | :07:21. | :07:25. | |
provide suggestions for protecting the data. It would not reveal | :07:25. | :07:29. | |
exactly what would trigger the alerts. An embarrassing launch of a | :07:29. | :07:35. | |
new video chat service from the two founders of Maxstoke, a star- | :07:35. | :07:39. | |
studded event to show of the technology was hit by technical | :07:39. | :07:43. | |
glitches as the screens froze and the video chats between celebrities | :07:43. | :07:47. | |
broke down. The entrepreneur has managed to get it working and | :07:47. | :07:56. | |
insist it will make the Internet less boring. Some surprisingly | :07:56. | :08:00. | |
strong growth figures from Australia. We're talking about | :08:00. | :08:10. | |
:08:10. | :08:11. | ||
growth figures. Take us through those numbers. What do they say? | :08:11. | :08:19. | |
Quite an impressive set of numbers. The economy has expanded by 1.3% in | :08:19. | :08:23. | |
the first three months of this year from the previous quarter. That is | :08:23. | :08:28. | |
more than twice the pace analysts were forecasting. Compared to a | :08:28. | :08:33. | |
year ago, the economy expanded by 4.3%, much stronger than what | :08:34. | :08:40. | |
analysts were forecasting. The economy in the United States grew | :08:40. | :08:45. | |
by 1.7% in the same measure while the EU economy has not grown. It | :08:45. | :08:50. | |
goes to show that Australia's economy has been quite resilient | :08:50. | :08:54. | |
despite the ongoing debt crisis in Europe and the talks about the | :08:54. | :08:58. | |
slowdown with China. One analyst I spoke to said that even though they | :08:58. | :09:04. | |
have seen some slowing demand for natural resources from China in the | :09:04. | :09:07. | |
mining sector, they are still seeing a lot of foreign investors | :09:07. | :09:11. | |
willing to invest in that sector, that has been the driving force of | :09:12. | :09:16. | |
the growth for the first three months of this year. And the news | :09:16. | :09:23. | |
the Australian dollar jumping significantly. Time now for a quick | :09:23. | :09:27. | |
look at the financial markets in the Far East. The numbers speak for | :09:27. | :09:34. | |
themselves. We have had a bit of a lift. People speak to American's | :09:35. | :09:40. |